DANBURY -- While western Connecticut continues its slow recovery from the Great Recession, foreclosures in towns across the region have skyrocketed in the past year, with Danbury alone seeing a jump of more than 64 percent.

In fact, the state ranks seventh in the nation, having experienced one foreclosure filing last year for every 752 homes, according to Realtytrac, a website that tracks foreclosures.

"There is a misconception that just because the market is getting better, and we genuinely believe that it is, there are fewer people entering foreclosure, and that's simply not true," said Larry Riefberg, a real estate lawyer.

Experts point to several reasons for the continued increase in the region's foreclosure rate, including a backlog caused by the state's slow court process for foreclosure filings, the numerous houses that remain underwater and homeowners who have received assistance in the past but have again reached the end of their rope.

Real estate activity continues to increase in the region -- closings over last year have increased by as much as 18 percent in some towns. Prices continue to languish, Realtors say, because foreclosures continue to be a drag on the market.

At least one out of every three or four property transfers in recent months has a financial institution named on one side of the transaction, said Doug Rose, vice president of the asset services division for Scalzo Group Real Estate Services.

"We'll probably see at least another year or year and half of foreclosures having a significant share of the market," he said.

Hanging on

Rose credits the continued increase in foreclosure activity to two factors, homeowners whose lawyers know how to "play" the system and stretch out the foreclosure process, as well as homeowners who were just barely hanging on in recent years and their homes continue to be underwater because of depressed prices in the market.

"The reality is we have people staying in their houses longer than they wanted to and they are trying to claw their way back," he said.

Riefberg said that while a good attorney who knows the process can stall the ultimate foreclosure, "that's not the issue as to why the foreclosure started in the first place."

"There is this undercurrent of housing that's still under water but the homeowners aren't interested in doing anything about it until there is a significant event in their life," he said.

That event could be anything from loosing their job, expecting a child, divorce, relocation or a myriad of other reasons.

He added that there is also what's known as a "strategic default," when someone realizes their home isn't nearly worth what they still owe on the property and decide the property isn't worth keeping.

"Many borrowers have reached the conclusion that they have to default because it's senseless to keep making payments when the house is so underwater," Riefberg said. "When the foreclosure does happen there are ways to mitigate the damages to ones credit and their ability to move forward."

And while the foreclosure process in Connecticut takes longer than other states, to the benefit of consumers, it also results in a "shadow inventory," of homes that continue to depress the market, according to Robert Morey, the regional director of northern Fairfield County for Remax Right Choice.

"The result is that we'll be living with foreclosures and distressed properties longer than other states," he said.

Institutional investors entering the market and turning over distressed properties are helping to speed up the process, Morey said.

"It accelerates the process of making properties whole again and contributing to the market," he said.

Rose said he recently sold a portfolio of residential mortgages valued at $30 million to investors for about $23 million.

"There have been whole industries created in the past five years that never existed before," he said, adding that a new company in Long Island has been buying up second mortgages for as little as 10 cents on the dollar.

The silver lining, Morey said, is that there are more opportunities for buyers.

"It means we're working through the process and every day we're getting closer to foreclosures no longer being a significant factor in the market."